JOIN USTolgay Ozbey (7th minute) and Baljit Sahni (54th) scored for East Bengal, while Mohun Bagan netted through Surkumar Singh (48th) in front of a 40,000-odd turn out at Yuba Bharati Krirangan.
East Bengal now have 41 points from 19 matches behind leaders Salgaocar (43 from 18) while Mohun Bagan (26 from 20) remained on sixth position of the I-League table.
There were jubilant scenes from East Bengal supporters who torched flames to celebrate their side's win. East Bengal notched up their fourth win over their arch rivals from five meetings in 2010-11.
East Bengal earlier had three wins over Mohun Bagan in the Federation Cup, Mohammedan SC Platinum Jubilee Cup and Calcutta League -- where they were eventual winners -- while I-League first-leg encounter between the two sides had ended in a draw.
With their main focus on the backline, Mohun Bagan averted a danger right after the kickoff when a watchful Anwar Ali cleared a fine move from Vashum to begin the proceedings.
Mohun Bagan had the first opportunity in the third minute when Chidi Edeh supplied the ball from the midfield in front of the open net.
But Ashim Biswas could only manage to strike it above the post in what could have been an easy lead by Mohun Bagan.
East Bengal, on the other hand, grabbed their first chance with Ozbey finding the target.
Ozbey used the long ball to perfection as the Australian opened his account against the arch rivals through a diagonal shot from the far post to give East Bengal an early lead.
East Bengal applied more pressure and in the 24th minute, Baljit almost scored from his header from a Ravinder Singh corner but only to hit the crosspiece.
East Bengal, now in full throttle, had a fine move two minute later through a Orji Penn cross but Mohun Bagan were lucky enough to escape with Deepak Mondal clearing it nicely.
Mohun Bagan's hugely successful striker Jose Ramirez Barreto, who was included in the playing eleven at last minute, failed to impress and did not seem match-fit after his right leg calf muscle injury.
Subair Muritala replaced the Brazilian in the 37th minute and the former got a fine chance minutes later.
But East Bengal's Jayanta Paul, who manned the goal in place of their first choice goalkeeper Sandip Nandy (double yellow), thwarted Muritala's effort as his side retained their 1-0 lead at interval.
The second-half began with a lot of excitement with Mohun Bagan bringing in the equaliser through Surkumar Singh in the 48th minute to bring alive at the floodlit atmosphere.
But East Bengal took sixth minute to restore their lead with a lovely flick by Sahni who used an Ozbey cross to perfection to put it past Mohun Bagan's goalkeeper Sangram Mukherjee.
A poor refereeing decision by Delhi's Deepak Singh denied East Bengal a penalty in the 63rd minute when Ozbey was brought down inside the box by Mondal.
More drama followed when the referee disallowed two goals scored by Mohun Bagan -- the first from a throw-in by N Mohan Raj.